The Wall Street Journal
Saturday, May 29, 2010
With everyone suddenly fretting about the need for a new world reserve currency, unorthodox views on the Federal Reserve are getting a new hearing.
Edwin Vieira Jr. escorts a visitor through his gray, clapboard home at the north end of the Shenandoah Valley, and into the woodworking shop. Laid out on a table is his latest project, a handcrafted doorframe, each joint precisely squared and fitted. Nearby, on the wall of the stairway leading to his study, is a copy of his real obsession: the U.S. Constitution.
I've driven to Virginia from New York to visit Mr. Vieira, a retired chemist and a lawyer, because I've been reading his magisterial, 1,800-page book called "Pieces of Eight." It is a two-volume treatise on the monetary powers of the Constitution. Now out of print, it has become a kind of cult classic, selling on the Internet for hundreds of dollars a set. It addresses questions that, with the value of the dollar having collapsed to 1,200th of an ounce of gold, are suddenly timely.
What is a dollar? How did it become our money of account? What powers in respect of money were given to the federal government in 1787? What disabilities, or prohibitions, are in the Constitution? How have we managed to get so far from the law as the Founders wrote it? And what can be done to bring us back from the brink?
The title of the book comes from the nickname for the coin the Founding Fathers were referring to when, in the Constitution, they twice used the word "dollars." Its definition was codified in the Coinage Act of 1792, which provided for minting gold and silver coins and defined a dollar as having "the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver."
Mr. Vieira speaks for a school of thought—it goes back to James Madison and Alexander Hamilton and comes together today in, among other places, the Foundation for the Advancement of Monetary Education—that reckons such dollars, and their free-market equivalent in gold, are the only constitutional money in America. Lately he has been arguing for the establishment by the states of separate monetary systems. The authority to do so is in Article 1, Section 10, of the Constitution, which prohibits the states from making "any Thing but gold and silver Coin a Tender in Payment of Debts."
"What are you going to do when the currency doesn't function any more?" is one of the ways Mr. Vieira puts the issue to me as we tour his study, a trig garret crammed with such books as a multivolume set of the Colonial Records of Rhode Island, where Mr. Vieira, the son of a U.S. Navy physician, was brought up. "If you look at the hyperinflations of the 20th century—Weimar Germany, Hungary, Argentina, Brazil, Uruguay, Bolivia—in every one of those systems, there was, somewhere in the world, a first-class currency that they could use, directly or indirectly [when their own currency collapsed]. What happens now, when the Federal Reserve Note goes down, what are we going to use?" He pauses and then asks, with a chuckle, "Are we going to stabilize the euro?"
The Southern Poverty Law Center has criticized Mr. Vieira because of the importance he attaches to the Founders' concept of the militia. He and other sound-money activists are sometimes dismissed as cranks, given that the Supreme Court sustained paper money as legal tender in 1871 (Knox v. Lee). But with the value of the dollar now at a historic low and everyone from the communist Chinese to the United Nations fretting about the need for a new world reserve currency, he is starting to look less like a crank than a prophet.
Mr. Vieira—who holds degrees from Harvard (a B.A., an M.A. a Ph.D. in chemistry and a doctorate of law)—came to the cause of constitutional money via his legal work. He started at the National Right to Work Legal Defense Foundation, where he argued and won a famous Supreme Court case, Communications Workers of America v. Beck (1988). The opinion, written by Justice William Brennan and joined by justices across ideological lines, established the right of a nonunion member not to have the fees he paid to a union for representational services go to political activity he disapproves of.
An earlier case drew Mr. Vieira into the money question. It involved the efforts of the owner of a property seized by Maryland in an eminent-domain proceeding to get paid in the gold or silver coin that states are permitted to make legal tender. Mr. Vieira, who speaks with a gentle voice most of the time, still shakes with indignation when he talks of the refusal of the courts even to consider the constitutional question.
He eventually lost that case, but his research took him in the early 1980s to Washington to meet Rep. Ron Paul (R., Texas), who was part of a just-established United States Gold Commission. An aide suggested Mr. Vieira submit his points to the commission in writing, and work began on what would become "Pieces of Eight."
The finished book begins with a quote from Justice Stephen J. Field's dissent in a legal tender case, Dooley v. Smith (1871), warning that arguments in favor of legal tender paper currency "tend directly to break down the barriers which separate a government of limited powers from a government resting in the unrestrained will of Congress."Mr. Lipsky, founding editor of The New York Sun, is the author of "The Citizen's Constitution: An Annotated Guide" (Basic Books, 2009).